By Anthony Domenici
Tenant insurance provides self-storage operators with an opportunity to increase sales and provide a valuable service to customers. So why do 35 percent of storage sites in Canada fail to offer this revenue-generator?
Canada facility operators have three options when it comes to tenant insurance. Let’s explore the advantages and costs of each:
Insurance with rental fee. With this type of tenant insurance, the fee is rolled into the storage rental price. The cost is usually between 75 cents and $1.50 per $1,000 worth of stored goods per month, plus your facility’s administration fee. This system can be expensive and involves proactive selling to the customer.
A locker fee. The average cost of this insurance is $2 per month for up to $25,000 of coverage per locker. Your site pays this amount to the insurer charges the tenant an administration charge, putting the customer’s cost at about $8 per month. This product is a simple sell but is designed for secure sites, and the security at your facility will be a consideration by the insurer. Many sites have implemented this method as mandatory.
Self-insuring customer’s lockers. This is an interesting option. It’s not insurance, it’s a convoluted form of offering protection. The fee collected is yours to keep, however, there are two major concerns. First, if there was a catastrophe, you’re on the hook for a potentially large payout. Second, the protection, wordings and limits are usually inferior to the insured program.
The first two insurance options mentioned above are the norm, while the third is often offered by large, multi-site operators. They all represent an additional service you can provide to every customer who walks into your facility. Your insurance broker can provide a point-of-sale brochure you can give to your customers. In addition, you should highlight your tenant-insurance program on your facility website.